Kate's Kale Chips produces a healthy snack made primarily of kale. Each bag of the product sells for $5. The company computes themanufacturing overhead rate on a quarterly basis based upon the planned number of units to be produced that quarter. The followingdata are from the projections of Kate's Kale Chips for the upcoming quarter:Projections24,000 bags26,000 bags$ 2.80$ 0.55$ 59,800$ 22,000SalesProductionVariable manufacturing cost per bagSales and distribution costs per bagTotal fixed manufacturing overheadFixed administrative overheadRequired:1. Compute the projected product cost per bag produced under full costing.2. Compute the projected product cost per bag under variable costing.(Round your answers to 2 decimal places.)1.Product cost under full costingper bag2.Product cost under variable costingper bag

1. Product cost under full costing = Variable manufacturing cost per bag + ( Total fixed…

Answered: Kate's Kale Chips produces a healthy…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 45,000 units during the quarter. RTD carries no inventories. Amount Per Unit Sales revenue $ 1,170,000 $ 26.00 Costs of fitting produced 900,000 20.00 Gross profit $ 270,000 $ 6.00 Administrative costs 207,000 4.60 Operating profit $ 63,000 $ 1.40 Fixed costs included in this income statement are $292,500 for depreciation on plant and machinery and miscellaneous factory operations and $94,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20 per unit. RTD can easily produce the 10,000 units with its existing…
Emersyn Industries Emersyn Industries makes Elsa dolls. Emersyn likes to have 20% of the next month's sales needs in ending finished goods inventory. Each doll requires 1.5 yards of fabric that costs Emersyn $0.50 per yard. Emersyn requires that ending inventory of direct materials (fabric) on hand at the end of each month be equal to 40% of the following month's production needs. From past experience, the company has learned that 15% of the company's sales are for cash. The remaining sales are made on credit with 10% collected in the month of sale, 60% collected in the month following the sale, and 30% in the second month following the sale. The following data was taken from Emersyn's master budget: February March April May June Expected Production Units 6,940 8,200 10,400 8,240 9,660 Expected Sales Units 6,800 7,500 11,000 8,000 9,200 Expected Sales $ $68,000 $75,000 $110,000 $80,000 $92,000
Johnson Stores produce and sell face powder called the 'Success' in cases. Each case is sold for $80. The following information relates to the product in the autumn and summer of 2020: Sales Production Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expenses Variable selling expenses Variable administrative expenses are 10% of sales value Fixed administrative expenses are 25% of sales value Autumn 23,400 units 28,500 units $136,800 $133,950 $71,250 $120,000 $25,500 $42,750 Summer 35,700 units 30,600 units $146,880 $143,820 $76,500 $122,000 $25,500 $45,900 Normal capacity for the year was 117,600 cases to be produced evenly throughout the year with a budgeted cost of $470,400. Assume that there will be no inventory held on January 1, 2020. Required: (1) Prepare profit statement for each of the two quarters using absorption and variable costing techniques. (2) Compute and reconcile the differences in the operating incomes of both…
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Kaplan, Inc. produces flash drives for computers, which it sells for $27 each. The variable cost to make each flash drive is $13. During April, 700 drives were sold. Fixed costs for April were $2 per unit for a total of $1,400 for the month. How much is the monthly break-even level of sales in dollars for Kaplan? Group of answer choices $100 $2,700 $8,400 $14,000
Gia's Foods produces frozen meals, which it sells for $8 each. The company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. All costs and production levels are exactly as planned. The following data are from Gia's Foods first month in business. January2007 Sales 1,000 meals Production 1,400 meals Variable manufacturing cost per meal $4.00 Sales commission cost per meal $1.00 Total fixed manufacturing overhead $700 Total fixed marketing and administrative costs $600 Requirements: i) Compute the product cost per meal produced under absorption costing and under variable costing. ii) Prepare the income statement for January 2007 using variable costing List three situations in which marginal costing, as a technique, aids decision-making.
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Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 45,000 units during the quarter. RTD carries no inventories. Amount Per Unit Sales revenue $ 1,170,000 $ 26.00 Costs of fitting produced 900,000 20.00 Gross profit $ 270,000 $ 6.00 Administrative costs 207,000 4.60 Operating profit $ 63,000 $ 1.40 Fixed costs included in this income statement are $292,500 for depreciation on plant and machinery and miscellaneous factory operations and $94,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20 per unit. RTD can easily produce the 10,000 units with its existing…
The Sock company buys hiking socks for GHS6 per pair and sells them for GHs 10. Management budgets monthly fixed costs of GHS 12.000 for sales volume between O and 12,000 pairs. Required: Consider the following questions separately by using the foregoing information each time. 1. The Sock Company plans to advertise in hiking magazines. The advertising campaign will increase total fixed costs by GHS2,000 per month. Calculate the new breakeven point in units. 2. In addition to selling hiking socks, the Sock Company would like to start selling sports socks. The Sock Company expects to sell one pair of hiking socks for every three pairs of sports socks. The Sock Company will buy the sports socks for GHS 4 per pair and sell them for GHS 8 per pair. Total fixed costs will stay at GHS 12,000 per month. Calculate the breakeven point in units for both hiking socks and sports socks

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